Brussels, 9 November 2011
Q&A: FISCUS programme for taxation and customs 2014-20
What is FISCUS?
FISCUS is the new financing programme covering EU customs and taxation for the period 2014-20, as foreseen within the Multi-Annual Financial Framework proposal adopted by the Commission in June (see IP/11/799). This programme is the successor of the current Fiscalis 2013 and Customs 2013 programmes. It will support cooperation between the customs and tax authorities and other parties through networking and knowledge-sharing, and by funding state of the art I.T. infrastructure and systems. In the current economic situation, this programme will deliver real benefits to public finances by improving the ability of Member States and the EU to collect revenue and fight fraud. It will also help Member States to cut costs, particularly by sharing I.T. development. Finally, this is a growth-promoting programme: it will facilitate trade, improve the functioning of the Internal Market and promote pro-growth tax reforms.
What is the budget for the programme, and how will it be allocated?
The budget for the 7 year period is EUR 777.6 million. This will be allocated through annual work programmes drawn up by the Commission each year, on the basis of the priorities identified.
What are the challenges for taxation and customs in the years ahead?
In the years ahead, tax and customs administrations need to be able to continue the important work that they already do to secure revenues and facilitate business and trade – only faster and more efficiently to keep pace with the ever-increasing demands of the modern economy. For example, the continual development of e-commerce is an opportunity for businesses and generates benefits for consumers in terms of access to products and in terms of price reductions; however, it is also a challenge for tax and customs administrations. Indeed, tax administrations need to develop new approaches to collect revenues and prevent tax evasion. From the customs perspective, e-commerce means more and smaller business operators; it also means a gigantic increase in the number of small consignments that goes through borders. Against this background customs administrations have to continue collecting customs duties, protecting citizens and enforcing intellectual property rights. More and more businesses are also taking advantage of the Internal Market to trade or expand cross-border, thereby having to deal with more than one tax administration. Close coordination amongst Member States and measures to reduce administrative burdens are essential to prevent tax obstacles from hindering this progress. In customs, EU imports have increased by 15% over the past 5 years, while exports have increased by more than 16%. This steady rise looks set to continue for the 2014-20 period, putting even greater demands on customs. In addition, customs' role in ensuring citizens' safety against dangerous goods has grown substantially over the past decades as we expanded the number of countries we traded with – a trend which is likely to continue. Customs also must continually adapt their processes to tackle new and innovative smuggling methods, and terrorist plots as they emerge.
What are the main objectives of the programme?
The principle objective of FISCUS is to support the Customs Union and strengthen the Internal Market by improving cooperation and coordination in taxation policies. The Regulation also outlines specific objectives aimed at meeting the challenges in taxation and customs in the years ahead. These include:
Supporting the application and implementation of EU law in both areas
Improving the capacities of tax and customs administrations
Reducing administrative burdens
Ensuring the safety and security of EU citizens
Tackling fraud and tax evasion
Facilitating trade and cooperating with trading partners
Protecting the EU’s and Member State’s financial interests
What type of actions are covered by this programme?
The proposed Regulation sets out the types of actions that are eligible for funding under the FISCUS programme. These include:
Joint Actions: Activities that allow Member States to pool knowledge and expertise, share information and work together in finding solutions, should mean more effective responses to current and future challenges.
Training Activities: More focus will be placed on online collaboration and training, enhancing the capacities of national administrators while saving time and travel costs linked to face-to-face training.
European I.T. Systems: Under FISCUS, national tax and customs will be supported in becoming fully-fledged e-administrations, making procedures quicker, cheaper and more efficient. Shared development in the field of I.T. would result in significant cost savings for Member States.
Tax and Customs were previously covered by 2 separate programmes. Why are they now being merged within one programme?
Merging the customs and tax programmes, which have been separate up to now, reflects the simplification policy of the Commission. It will also ensure coherence, given the parallels between the two policy areas, while still ensuring that separate activities in these fields can continue effectively.
What is new compared to the previous tax and customs programmes?
The fundamental change is that tax and customs now fall within one single programme, with one set of shared objectives. New elements expand on what was already in the previous programmes e.g. expert teams are provided for, to pool knowledge and help share development (particularly in I.T), and there is now the possibility for country-specific assistance to be given where needed. For taxation, there is a broader scope than the current programme, as it covers all taxes subject to EU legislation, rather than just VAT, excise duties and income and capital taxes. In addition, the objectives have been expanded to cover the fight against fraud, the reduction of administrative burden and compliance costs, and cooperation with third countries and parties.
Is this proposal in line with the principle of subsidiarity?
Customs is an area of exclusive EU competence, and many of the customs activities are of a cross-border nature. The Customs Union protects the financial interests of the EU and Member States by collecting duties, fees and taxes, and helping to prevent smuggling and fraud. It also checks that goods coming in from other countries are safe and in line with EU legislation. Ensuring the smooth flow of such large volumes of trade on a daily basis, while simultaneously protecting citizens against safety and security risks requires a high level of cooperation between customs administrations in the Member States. EU action is needed to support the protection of the EU's external borders and avoid distortions to the Internal Market.
While much of tax policy remains an area of exclusive national competence, cooperation and coordination amongst the Member States are essential. This helps to ensure EU legislation in the area of taxation is properly implemented, but also makes tackling the challenges to taxation more efficient and successful. Without EU-led cooperation in this field, Member States would lose revenues to unfair tax competition, tax shopping and tax evasion, and citizens and businesses would face considerable administrative burdens, compliance cost and greater risk of double taxation.
FISCUS is not intended to create further harmonisation of national tax systems. Rather, it will help in the coordination of the national tax systems and ensure that the existence of 27 different tax systems do not hinder the Internal Market, and that EU economies are based on quality taxation.
How does FISCUS fit in with the wider objectives of the EU?
The programme will contribute to Europe 2020 by strengthening the function of the Single Market and the Customs Union, and promoting growth and innovation by protecting intellectual property rights at the borders. The aim of working towards national e-administrations for tax and customs contributes to the goal of a digital Single market (Digital agenda for Europe).